Agriculture Committee on June 1st, 2006

[The Chair, Conservative, Gerry Ritz]

But again, Mr. Satherstrom, we're talking about a paper chase, not an actual product. You don't actually have the product tested and say this is above or below the 85%.

[Darwin Satherstrom]

We can ask for samples of the product they're importing.

[The Chair, Conservative, Gerry Ritz]

But have you? Can you give an example of when you've actually tested the product, not just checked the paper?

[Darwin Satherstrom]

There are cases where we do send products to the lab. It's difficult for me to respond with respect to a very specific case, because the Customs Act prevents me from referring to very specific cases.

[The Chair, Conservative, Gerry Ritz]

Just give me how many instances there were. I don't need the name of the company.

[Darwin Satherstrom]

I don't know the answer to that. It's difficult to answer that question.

[The Chair, Conservative, Gerry Ritz]

Thank you.

Mr. Atamanenko, five minutes.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you. I just want to point out the fact that my colleagues here today are saying it is rural existence—the survival of our rural life—which is at stake. Without the political will, we can justify everything we say. For example, we can say that there are fewer dairy farmers because of the way the market is changing. The government and politicians must have the will to maintain our rural existence. That is what is at stake, and we depend on you to help us achieve that goal.

On April 15, the Minister of Agriculture and Agri-Food announced that processors and farmers would get together to discuss what could be done instead of changing section 28 or anything else.

So where are we at? Have any decisions been made or measures taken to control such things as the imports of certain milk protein concentrates? I would like to know whether the process is working, and whether you can keep us informed.

[Graham Barr]

The discussions are taking place between the producers and processors. We expect that the government will be informed of their progress at the appropriate time, but at this point it's a process between the producers and the processors.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I think that's all I have.

[The Chair, Conservative, Gerry Ritz]

Thank you, Alex.

We'll move to Mr. Easter, for five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

I have a fairly technical question for the CFIA.

Based on your earlier answers, I believe you indicated that MPCs are permitted in the production of dairy products under the dairy product regulations. Are those all dairy products? That is one question. But more technically, if this is the case, that the CAPA regulations allow MPCs, then my understanding would be that this is provided by allowing milk solids in the making of products like cheese, etc.

The problem is this: milk solids, by definition, exclude components that have been altered in their chemical composition. MPCs—simplified, I guess—are a modified milk ingredient. Modified milk ingredients, by definition, refer to components that have been altered in their chemical composition. So we're going in different directions.

The CITT removed MPCs with concentrates of over 85% from the tariff chapter covering dairy products to chapter 35. The CITT considers that MPCs of 85% concentration are not a natural milk component. Therefore, my question is—and it's technical, I will admit, Mr. Orriss—on what grounds does CFIA consider MPCs to be a milk solid?

[Greg Orriss]

Thank you for the question.

Mr. Chairman, because of the specificity and technical nature of the question, I will call upon my colleague, Ms. Gail Daniels, to join me at the table to help me in the response to that question.

[The Chair, Conservative, Gerry Ritz]

Do you need the question repeated, Ms. Daniels?

[Wayne Easter, Liberal, Malpeque, PE]

It's a long question. It'll take up all my time!

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Gerry Ritz]

Well, I was hoping so, Mr. Easter, but we won't go there.

You have the basic thrust of the question, though? You're okay with it?

[Gail Daniels, Chief, Dairy Programs, Canadian Food Inspection Agency]

I think so.

[The Chair, Conservative, Gerry Ritz]

Thank you.

[Gail Daniels]

I guess it depends on the processes and technology that are used to make milk protein concentrates, whether or not the chemical composition is altered. Depending on the process, that may not be the case, so that it would be a milk solid. In general, usually the milk protein concentrates are permitted in the cheese products, where they would be used to provide the main function of cheeses, which is the protein aspect.

[Wayne Easter, Liberal, Malpeque, PE]

So are you saying that MPCs are not allowed in other dairy products?

[Gail Daniels]

They're allowed in products where you would be allowed to use milk or milk products in the composition of a product. Now, depending on the product, you may not want protein in it. For example, there's not much protein in ice cream, so milk protein concentrates wouldn't be used in that. But for most of the products that allow milk or milk products, if MPCs would be useful, they could be permitted.

[Wayne Easter, Liberal, Malpeque, PE]

All right. We'll have a look at this in the blues and go from there.

The implications of this are really serious. Mr. Tudor Price answered earlier that the quotas managed by stakeholders along lines of predicted domestic market—those weren't your exact words—and dairy consumption around the world are going down. But in this instance in Canada, you really have to consider the impact of the amount of domestic production that is being displaced by MPCs, which goes against the original intent—which I asked about earlier—of the supply management system stopping milk per se, so that we would know what would be coming into the domestic market and manage our supply accordingly.

Now, we're seeing it being broken down and re-established again—and we can get into a technical argument on whether CFIA is right or wrong—but the fact of the matter is that Canadian dairy farmers are being much harder put by than farmers in other countries, because their domestic market is being displaced in a number of ways. One, it's declining, and two, other product is really getting around the system by coming in this way.

Mr. Bellavance said earlier that there needed to be political will, and the response was that you had outlined the implications of MPCs to ministers. Can you table before us what you said those implications would be on the various options that government may take? Or is that just privy to ministers?

[Richard Tudor Price]

Mr. Chair, I will just clarify something in response to Mr. Easter's question.

I hope I didn't say that domestic markets were declining. What I did say was that there had been growth in the market-sharing quota, that is, the size of the national market in relation to consumer demand since the end of the Uruguay Round and that the national quota had peaked a couple of years ago and has fallen back somewhat.

But as I said in my answer to Mr. Anderson, the imports of MPCs do not affect the national quota. What they do affect is the skim milk powder surplus, because the national quota is set on a butter fat basis.

[Wayne Easter, Liberal, Malpeque, PE]

But they do affect it. They displace the amount of production that Canadian producers can produce, do they not?